Financial Performance - Q3 FY25 - Sales increased by $62.7 million, a 26.9% increase, reaching $296.3 million compared to $233.6 million in Q3'24[13] - Adjusted EBIT increased by $17.5 million, a 38.6% increase, reaching $62.7 million compared to $45.2 million in Q3'24[13] - Adjusted EPS increased by 25%, reaching $1.60 compared to $1.28 in Q3'24[12] - Record ending backlog of $1.17 billion, a 75% increase from September 30, 2024[14] Segment Performance - A&D - Entered Orders increased by $492.3 million, a 546.5% increase, reaching $582.4 million compared to $90.1 million in Q3'24[19] - Sales increased by $49.1 million, a 56.3% increase, reaching $136.3 million compared to $87.2 million in Q3'24[19] - Adjusted EBIT increased by $19.1 million, a 94.3% increase, reaching $39.3 million compared to $20.2 million in Q3'24[19] Segment Performance - USG - Entered Orders increased by $5.5 million, a 5.5% increase, reaching $105.5 million compared to $100.0 million in Q3'24[25] - Sales increased by $2.1 million, a 2.3% increase, reaching $92.4 million compared to $90.3 million in Q3'24[25] - Adjusted EBIT decreased by $0.4 million, a -2.0% decrease, reaching $21.8 million compared to $22.2 million in Q3'24[25] Segment Performance - Test - Sales increased by $11.6 million, a 20.7% increase, reaching $67.7 million compared to $56.1 million in Q3'24[30] - Adjusted EBIT increased by $1.4 million, a 15.4% increase, reaching $10.7 million compared to $9.3 million in Q3'24[30] - Entered Orders decreased by $3.6 million, a -5.7% decrease, reaching $61.2 million compared to $64.8 million in Q3'24[30] Financial Performance - YTD Q3 FY25 - Sales increased by $97.1 million, a 15.0% increase, reaching $742.7 million compared to $645.6 million in Q3 YTD '24[38] - Adjusted EBIT increased by $30.7 million, a 28.6% increase, reaching $138.0 million compared to $107.3 million in Q3 YTD '24[38] - Adjusted EPS increased by 24.1%, reaching $3.71 compared to $2.99 in Q3 YTD '24[38] FY25 Guidance - Full year revenue from Continuing Operations is expected to be $1.075 billion - $1.105 billion[52] - Full Year Adjusted EPS from Continuing Operations is now expected to be in the range of $5.75 - $5.90, a 21% - 24% growth over FY'24[52] - Q4 Adjusted EPS from Continuing Operations is expected to be in the range of $2.04 - $2.19, a 14% - 22% growth over Q4'24[51]

[Q3 2025 Earnings Summary](index=1&type=section&id=Q3%202025%20Earnings%20Summary) [Operating Highlights](index=1&type=section&id=Operating%20Highlights) ESCO Technologies reported strong Q3 2025 results with 27% sales growth and 25% Adjusted EPS increase, achieving a record $1.17 billion backlog Q3 2025 Key Financial Metrics (vs. Q3 2024) | Metric | Q3 2025 | Q3 2024 | Change | | :--- | :--- | :--- | :--- | | Sales | $296.3 million | $233.6 million | +27% | | Organic Sales | $259.2 million | $233.6 million | +11% | | GAAP EPS (Continuing Ops) | $0.96 | $1.10 | -13% | | Adjusted EPS (Continuing Ops) | $1.60 | $1.28 | +25% | | Entered Orders | $749.0 million | - | +194% | | Book-to-Bill Ratio | 2.53x | - | - | | Ending Backlog | $1.17 billion | - | Record High | - The company completed the sale of VACCO Industries on July 21, 2025, with its operating results now presented as Discontinued Operations and excluded from discussions of continuing operations[2](index=2&type=chunk) Year-to-Date Cash Flow from Operating Activities (in millions) | Category | YTD Q3 2025 | YTD Q3 2024 | Change | | :--- | :--- | :--- | :--- | | Continuing Operations | $88 | $63 | +$25 | | Discontinued Operations | $44 | ($8) | +$52 | | **Total Cash Flow** | **$132** | **$55** | **+$77** | [CEO Commentary](index=2&type=section&id=CEO%20Commentary) The CEO highlighted ESCO's strategic transformation through the Maritime acquisition and VACCO divestiture, driving strong growth and a raised FY 2025 outlook - The company has undergone a significant transformation by acquiring ESCO Maritime Solutions and divesting VACCO Industries, strategically focusing on expanding its Navy business while exiting the space sector[4](index=4&type=chunk) - With a newly enhanced portfolio in attractive long-term growth markets and a record backlog, the company expects to continue delivering above-market growth[5](index=5&type=chunk) Q3 2025 Performance Metrics Highlighted by CEO | Metric | Q3 2025 Result | | :--- | :--- | | Sales Increase | 27% | | Adjusted EPS Increase (Continuing Ops) | 25% | | Adjusted EBIT Margin | 21.1% (+180 bps) | [Segment Performance](index=2&type=section&id=Segment%20Performance) [Aerospace & Defense (A&D)](index=2&type=section&id=Aerospace%20%26%20Defense%20(A%26D)) The A&D segment delivered exceptional Q3 results, with significant sales and Adjusted EBIT growth, and orders skyrocketing to a record $832 million backlog A&D Segment Performance - Q3 2025 vs Q3 2024 (in millions) | Metric | Q3 2025 | Q3 2024 | Change | | :--- | :--- | :--- | :--- | | Sales | $136.3 | $87.2 | +56% | | Organic Sales | $99.2 | $87.2 | +14% | | Adjusted EBIT | $39.3 | $20.2 | +95% | | Adjusted EBIT Margin | 28.8% | 23.2% | +560 bps | | Entered Orders | $582 | $90 | +547% | | Book-to-Bill | 4.27x | - | - | | Ending Backlog | $832 | - | Record High | - Order strength was driven by over **$80 million** in Virginia and Columbia Class submarine orders at Globe and nearly **$50 million** in new orders at Maritime during the quarter[5](index=5&type=chunk) - Margin improvement was driven by price increases, favorable product mix, and leverage on higher volume, further boosted by the addition of the higher-margin Maritime business[5](index=5&type=chunk) [Utility Solutions Group (USG)](index=3&type=section&id=Utility%20Solutions%20Group%20(USG)) The USG segment reported modest 2% sales growth to $92.4 million in Q3 2025, with slight Adjusted EBIT margin contraction, but saw a 6% increase in entered orders to $106 million USG Segment Performance - Q3 2025 vs Q3 2024 (in millions) | Metric | Q3 2025 | Q3 2024 | Change | | :--- | :--- | :--- | :--- | | Sales | $92.4 | $90.3 | +2% | | Adjusted EBIT | $21.8 | $22.2 | -2% | | Adjusted EBIT Margin | 23.6% | 24.6% | -100 bps | | Entered Orders | $106 | $100 | +6% | | Book-to-Bill | 1.14x | - | - | | Ending Backlog | $137 | - | - | - Doble achieved record quarterly orders of **$87 million**, an increase of **7%** over the prior year, driven by strength across all product lines and a large HV Test System order[9](index=9&type=chunk) [RF Test & Measurement (Test)](index=3&type=section&id=RF%20Test%20%26%20Measurement%20(Test)) The Test segment achieved strong 21% sales growth to $67.7 million in Q3 2025, with Adjusted EBIT increasing 15%, despite a slight margin decrease and a 6% decline in entered orders Test Segment Performance - Q3 2025 vs Q3 2024 (in millions) | Metric | Q3 2025 | Q3 2024 | Change | | :--- | :--- | :--- | :--- | | Sales | $67.7 | $56.1 | +21% | | Adjusted EBIT | $10.7 | $9.3 | +15% | | Adjusted EBIT Margin | 15.9% | 16.6% | -70 bps | | Entered Orders | $61 | $65 | -6% | | Book-to-Bill | 0.90x | - | - | | Ending Backlog | $196 | - | - | - The decrease in orders was primarily due to lower U.S. industrial orders compared to Q3 2024, which included a large project booking, partially offset by a strong quarter for Test & Measurement[9](index=9&type=chunk) [Business Outlook – 2025](index=3&type=section&id=Business%20Outlook%20%E2%80%93%202025) [Updated FY 2025 Guidance](index=3&type=section&id=Updated%20FY%202025%20Guidance) ESCO has increased its full-year fiscal 2025 guidance, with revenue from continuing operations projected between $1.075 billion and $1.105 billion, and Adjusted EPS raised to $5.75-$5.90 Updated FY 2025 Revenue Guidance (Continuing Operations) (in millions) | Guidance Component | Amount | | :--- | :--- | | Prior Guidance (May) | $1,180 | | Less: Discontinued Ops (VACCO) | ($125) | | Guidance Increase | $20 | | **Updated Sales Guidance** | **$1,075 - $1,105** | Updated FY 2025 Adjusted EPS Guidance (Continuing Operations) | Guidance Component | Amount | | :--- | :--- | | Previous Guidance (May) | $5.85 - $6.15 | | Less: Discontinued Ops (VACCO) | ($0.50) | | Guidance Increase | $0.40 - $0.25 | | **Updated Adj. EPS Guidance** | **$5.75 - $5.90** | - Management expects Q4 2025 Adjusted EPS from Continuing Operations to be in the range of **$2.04 to $2.19**, representing **14% to 22%** growth over Q4 2024[11](index=11&type=chunk) [Shareholder Information](index=4&type=section&id=Shareholder%20Information) [Dividend Payment](index=4&type=section&id=Dividend%20Payment) The company has declared its next quarterly cash dividend of $0.08 per share, scheduled for payment in October 2025 - A quarterly cash dividend of **$0.08 per share** will be paid on October 16, 2025, to stockholders of record on October 2, 2025[12](index=12&type=chunk) [Conference Call](index=4&type=section&id=Conference%20Call) ESCO will host a conference call and live webcast on August 7 at 4:00 p.m. Central Time to discuss its Q3 2025 financial results - The company will host a conference call with a live audio webcast and slide presentation on August 7 at 4:00 p.m. Central Time to discuss Q3 2025 results[13](index=13&type=chunk) [Financial Statements](index=6&type=section&id=Financial%20Statements) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The income statement for Q3 2025 shows net sales of $296.3 million, with earnings from continuing operations decreasing to $24.8 million due to increased costs Q3 Statement of Operations Summary (in thousands) | Account | Q3 2025 | Q3 2024 | | :--- | :--- | :--- | | Net Sales | $296,344 | $233,568 | | Total costs and expenses | $263,275 | $197,602 | | Earnings from continuing operations | $24,755 | $28,312 | | Net earnings | $26,065 | $29,230 | | Diluted GAAP EPS (Continuing Ops) | $0.96 | $1.10 | | Diluted Adjusted EPS (Continuing Ops) | $1.60 | $1.28 | YTD Q3 Statement of Operations Summary (in thousands) | Account | YTD Q3 2025 | YTD Q3 2024 | | :--- | :--- | :--- | | Net Sales | $742,714 | $645,621 | | Total costs and expenses | $649,428 | $565,251 | | Earnings from continuing operations | $71,445 | $63,330 | | Net earnings | $80,571 | $67,618 | | Diluted GAAP EPS (Continuing Ops) | $2.76 | $2.46 | | Diluted Adjusted EPS (Continuing Ops) | $3.71 | $2.99 | [Condensed Business Segment Information](index=8&type=section&id=Condensed%20Business%20Segment%20Information) This section details ESCO's segment performance, with Aerospace & Defense being the largest contributor to Q3 2025 sales and Adjusted EBIT, showing substantial year-over-year growth Q3 2025 Segment Performance (in thousands) | Segment | Net Sales | As Adjusted EBIT | | :--- | :--- | :--- | | Aerospace & Defense | $136,324 | $39,319 | | USG | $92,357 | $21,789 | | Test | $67,663 | $10,732 | | **Total** | **$296,344** | **$62,656** | YTD Q3 2025 Segment Performance (in thousands) | Segment | Net Sales | As Adjusted EBIT | | :--- | :--- | :--- | | Aerospace & Defense | $307,819 | $81,016 | | USG | $269,784 | $63,140 | | Test | $165,111 | $21,988 | | **Total** | **$742,714** | **$138,002** | [Condensed Consolidated Balance Sheets](index=10&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, ESCO's balance sheet reflects significant changes due to acquisition activity, with total assets increasing to $2.53 billion and long-term debt to $505 million Balance Sheet Summary (in thousands) | Account | June 30, 2025 | Sept 30, 2024 | | :--- | :--- | :--- | | Total current assets | $754,723 | $668,649 | | Goodwill & Intangibles | $1,505,634 | $933,459 | | **Total Assets** | **$2,526,385** | **$1,838,620** | | Total current liabilities | $496,840 | $349,854 | | Long-term debt | $505,000 | $102,000 | | **Total Shareholders' Equity** | **$1,326,614** | **$1,237,350** | [Consolidated Statements of Cash Flows](index=11&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended June 30, 2025, net cash from operating activities significantly increased to $132.0 million, while investing activities used $510.2 million primarily for acquisitions YTD Cash Flow Summary (in thousands) | Cash Flow Activity | YTD Q3 2025 | YTD Q3 2024 | | :--- | :--- | :--- | | Net cash from operating activities | $132,002 | $55,454 | | Net cash used by investing activities | ($510,200) | ($89,888) | | Net cash provided by financing activities | $390,599 | $55,301 | | **Net increase in cash** | **$12,853** | **$21,176** | [Other Selected Financial Data](index=12&type=section&id=Other%20Selected%20Financial%20Data) The company's total backlog reached a record $1.165 billion at the end of Q3 2025, driven by $749 million in new orders, primarily from the Aerospace & Defense segment Q3 2025 Backlog and Orders by Segment (in thousands) | Segment | Beginning Backlog | Entered Orders | Ending Backlog | | :--- | :--- | :--- | :--- | | A&D | $385,491 | $582,354 | $831,521 | | USG | $124,274 | $105,524 | $137,441 | | Test | $202,971 | $61,152 | $196,460 | | **Total** | **$712,736** | **$749,030** | **$1,165,422** | [Reconciliation of Non-GAAP Financial Measures](index=13&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) This section reconciles GAAP EPS to Adjusted EPS, showing that Q3 2025 GAAP EPS of $0.96 was adjusted by $0.64 per share, primarily for acquisition-related costs, to reach $1.60 Q3 2025 EPS Reconciliation (Continuing Operations) | Description | Per Share Amount | | :--- | :--- | | GAAP EPS | $0.96 | | Adjustments | $0.64 | | **As Adjusted EPS** | **$1.60** | - The primary adjustments for Q3 2025 included **$0.40** for acquisition-related amortization, **$0.15** for corporate acquisition costs, and **$0.08** for Maritime inventory step-up charges and stamp duties[39](index=39&type=chunk) [Appendix](index=4&type=section&id=Appendix) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This section contains the company's standard safe harbor statement, advising that all forward-looking guidance is subject to numerous risks and uncertainties - Management's guidance and other forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially, including but not limited to supply chain disruptions, economic conditions, government funding availability, and competition[14](index=14&type=chunk)[15](index=15&type=chunk) [Non-GAAP Financial Measures](index=5&type=section&id=Non-GAAP%20Financial%20Measures) ESCO explains its use of non-GAAP financial measures like EBIT, Adjusted EBIT, and Adjusted EPS to assess operational profitability and facilitate industry comparisons - The company uses non-GAAP measures like EBIT, Adjusted EBIT, and Adjusted EPS to assess operational profitability and allocate resources[16](index=16&type=chunk)[17](index=17&type=chunk) - These measures are presented as supplemental information to facilitate comparisons with other companies and are not intended to replace GAAP measures[17](index=17&type=chunk)

Core Insights - ESCO Technologies Inc. reported a 27% increase in Q3 sales to $296 million, while GAAP EPS from continuing operations decreased by 13% to $0.96. Adjusted EPS from continuing operations increased by 25% to $1.60 [1][4][5] - The company raised its FY 2025 adjusted EPS guidance to a range of $5.75 to $5.90, reflecting a growth of 21% to 24% [1][10][11] Financial Performance - Q3 2025 sales increased by $62.7 million (27%) compared to Q3 2024, with organic sales (excluding Maritime sales) increasing by $25.6 million (11%) [5][6] - Entered orders surged by 194% to $749 million, resulting in a book-to-bill ratio of 2.53x and a record backlog of $1.17 billion [1][5][7] - Net cash provided by operating activities from continuing operations was $88 million YTD, an increase of $25 million compared to the prior year [5] Segment Performance - Aerospace & Defense (A&D) segment sales increased by $49.1 million (56%) to $136.3 million, driven by a 200% increase in Navy sales [6][29] - Utility Solutions Group (USG) sales increased by $2.1 million (2%) to $92.4 million, with Doble's sales up by 1% and NRG sales up by 8% [12][29] - Test & Measurement segment sales increased by $11.6 million (21%) to $67.7 million, with EBIT and adjusted EBIT increasing to $10.7 million [12][29] Business Outlook - The company expects FY 2025 revenue from continuing operations to be in the range of $1.075 to $1.105 billion, reflecting a 17% to 20% increase over the prior year [10][11] - Q4 adjusted EPS from continuing operations is expected to be in the range of $2.04 to $2.19, representing a growth of 14% to 22% over Q4 2024 [13] Dividend Information - The next quarterly cash dividend of $0.08 per share is scheduled for payment on October 16, 2025, to stockholders of record on October 2, 2025 [14]

Core Insights - ESCO Technologies Inc. has completed the divestiture of VACCO Industries to RBC Bearings Incorporated for net proceeds of approximately $275 million, reflecting customary working capital adjustments since the announcement on May 20, 2025 [1] Company Overview - ESCO Technologies is a global provider of highly engineered products and solutions, serving diverse end-markets including aviation, Navy, space, and industrial sectors [2] - The company manufactures filtration and fluid control products, advanced composites, and power management solutions, and is an industry leader in RF test and measurement products and systems [2] - ESCO has a global presence with offices and manufacturing facilities worldwide, headquartered in St. Louis, Missouri [2]

Core Viewpoint - ESCO Technologies Inc. is set to report its third quarter financial results on August 7, 2025, followed by a conference call to discuss the results and related commentary [1]. Company Overview - ESCO Technologies is a global provider of highly engineered products and solutions, serving diverse end-markets including aviation, Navy, space, and industrial sectors [3]. - The company manufactures filtration and fluid control products, advanced composites, and power management solutions [3]. - ESCO is recognized as an industry leader in designing and manufacturing RF test and measurement products and systems, along with providing diagnostic instruments, software, and services to industrial power users and the electric utility and renewable energy industries [3]. - The company is headquartered in St. Louis, Missouri, and has offices and manufacturing facilities worldwide [3].

Company Overview - Esco Technologies (ESE) currently holds a Momentum Style Score of B, indicating a positive momentum outlook [3] - The company has a Zacks Rank of 1 (Strong Buy), suggesting strong potential for outperformance in the market [4] Price Performance - ESE shares have increased by 7.19% over the past week, outperforming the Zacks Manufacturing - Electronics industry, which rose by 5.16% during the same period [6] - Over the last quarter, ESE shares have surged by 36.37%, and they have gained 83.33% over the past year, significantly outperforming the S&P 500, which increased by 10.42% and 14.64% respectively [7] Trading Volume - The average 20-day trading volume for ESE is 208,681 shares, which serves as a useful indicator of market interest and price movement [8] Earnings Outlook - In the past two months, one earnings estimate for ESE has been revised upward, while none have been revised downward, leading to an increase in the consensus estimate from $5.70 to $6.07 [10] - For the next fiscal year, one estimate has also moved upwards with no downward revisions, indicating a positive earnings outlook [10] Conclusion - Considering the positive price performance, trading volume, and favorable earnings outlook, ESE is positioned as a 1 (Strong Buy) stock with a Momentum Score of B, making it a compelling investment option [12]

Group 1 - Esco Technologies (ESE) is currently outperforming its peers in the Industrial Products sector, with a year-to-date return of 45.2% compared to the sector average of 2.7% [4] - The Zacks Consensus Estimate for Esco Technologies' full-year earnings has increased by 6.5% over the past quarter, indicating improved analyst sentiment and a stronger earnings outlook [4] - Esco Technologies holds a Zacks Rank of 1 (Strong Buy), suggesting it is poised to outperform the broader market in the next one to three months [3] Group 2 - Esco Technologies is part of the Manufacturing - Electronics industry, which consists of 17 stocks and currently ranks 53 in the Zacks Industry Rank, with an average gain of 2.6% this year [6] - Another notable stock in the Industrial Products sector is Kion Group (KIGRY), which has returned 65.5% year-to-date and has a Zacks Rank of 2 (Buy) [5] - Kion Group's consensus estimate for current year EPS has increased by 25.4% over the past three months, highlighting strong performance within its industry [5]

Core Viewpoint - Esco Technologies (ESE) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - Institutional investors utilize earnings estimates to determine the fair value of stocks, leading to buying or selling actions that affect stock prices [4]. Company Performance and Outlook - The upgrade reflects an improvement in Esco Technologies' underlying business, suggesting that investors may push the stock price higher due to rising earnings estimates [5][10]. - Esco Technologies is projected to earn $6.07 per share for the fiscal year ending September 2025, with a 6.5% increase in the Zacks Consensus Estimate over the past three months [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [7][9]. - The upgrade to Zacks Rank 2 places Esco Technologies in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [10].

Group 1 - Esco Technologies (ESE) is a notable stock within the Industrial Products sector, currently ranked 10 among 16 groups in the Zacks Sector Rank [2] - The Zacks Rank system, which focuses on earnings estimates and revisions, indicates that Esco Technologies has a Zacks Rank of 2 (Buy), suggesting a positive earnings outlook [3] - Over the past three months, the Zacks Consensus Estimate for Esco Technologies' full-year earnings has increased by 6.5%, reflecting improved analyst sentiment [4] Group 2 - Esco Technologies has achieved a year-to-date return of approximately 38.2%, significantly outperforming the Industrial Products sector, which has returned an average of -0.3% [4] - In comparison, Kion Group (KIGRY) has also outperformed the sector with a year-to-date return of 51.9% and a consensus EPS estimate increase of 25.4% over the past three months [5] - Esco Technologies is part of the Manufacturing - Electronics industry, which is currently ranked 74 in the Zacks Industry Rank, while this industry has seen a loss of about 7.2% year-to-date [6]

Core Viewpoint - ESCO Technologies Inc. has entered into a definitive agreement to sell VACCO Industries to RBC Bearings Incorporated for expected gross cash proceeds of $310 million, aligning with its long-term strategy to focus on high-growth end-markets [1][2][3] Group 1: Transaction Details - The transaction is subject to customary regulatory approvals and is expected to yield a sizable book gain, with net proceeds planned for debt reduction related to a previous acquisition [2] - VACCO Industries has been part of ESCO since its formation in 1990 and is recognized as a key supplier of mission-critical solutions [3] Group 2: Strategic Implications - The divestiture supports ESCO's strategy to concentrate on core high-growth markets, enhancing its portfolio focus [3] - The CEO of ESCO expressed confidence in the future of VACCO under RBC Bearings, indicating a positive outlook for the company post-transaction [3] Group 3: Company Overview - ESCO Technologies is a global provider of engineered products and solutions across diverse end-markets, including aviation, Navy, space, and industrial sectors [4] - The company specializes in manufacturing filtration and fluid control products, advanced composites, and power management solutions, and is a leader in RF test and measurement products [4]